Co needs out of MAXM deal. They should be going to court and not negotiating breach of minimum share price caused by other parties breach of best price selling efforts and prohibition against shorting stock in RCPI leading to huge decline in share price, without which minimum share price would not have been breached to begin with. Bad deal and other party has not acted in good faith. RCPI needs to take to court and get out of deal, period.
MAXM equity conditions are not public, they are in the notes themselves, hidden as it were, but they are revealed in the 10Q and unless company makes public, public does not and will not know when shares are issued to convertible noteholders. This is wrong. Even with announcements, minimum price is not made known. Wrong again by company. The company refused to obtain shareholder approval for this bad funding deal and some details are hidden all which are salient. No announcement has been made regarding negotiations, and no word about breach by other party that led to non compliance with equity agreement. It should be noted that Nasdaq wrote company requiring they get shareholder approval of initial Maxim deal they inked June 19th if they wanted to continue to be listed. On October 15th the company inked second Maxim deal and was promptly delisted by Nasdaq on November 3rd, and after negotiations paid thru the roof for delisting in part because of deals with Maxim and their not obtaining shareholder approval and then after both parties knew full well delisting was to take place it was an equity condition of deal and company paid Maxim group and convertible bondholders over $600,000 in make whole penalty alone and paid other interest and penalties for breach it knew was to take place.
If Co does not take legal action and sue for breach, including for short selling and not selling on best efforts to obtain best price, not only will Maxim get away with stock murder, but stock price may actually be worth what it is now trading at, when it could be worth so much more without this bad deal and the short selling shenanigans by Maxim. Mullan needs to do the right thing and sue for breach, get out of the deal and obtain alternative funding.
Here is what Mullan had to say in the 10-Q, while either complicit or ignorant of shorting and stock price manipulation going on leading to non compliance of company with equity conditions in the notes.
Pursuant to the amendment on February 4, 2016 of the Senior Secured Convertible Notes, our obligation to maintain a cash reserve with regards to the Notes will be further reduced, and corresponding amounts held in the Control Accounts transferred to our unrestricted bank accounts, subject to satisfaction or waiver of certain Equity Conditions (as defined in the Notes), as follows: $1.0 million on each of April 16, 2016 and the 11 th trading day of each calendar month thereafter. These Equity Conditions (as defined in the Notes), include, without limitation, the existence of an effective registration statement covering the resale of the shares issued in payment (or, in the alternative, the eligibility of the shares issuable pursuant to the Notes for sale without restriction under Rule 144 and without the need for registration), and a certain minimum trading volume and trading price in the stock to be issued. We filed our registration on February 4, 2016 which was declared effective with the SEC on February 11, 2016. On February 8 and April 26, 2016, the Holders transferred $1,000,000 and $750,000 to our unrestricted bank account. We are currently not in compliance with our Equity Conditions and we are negotiating with the Holders of the Notes to address whether the Notes will be amended or the Equity Conditions waived to permit payment in shares and additional disbursements of proceeds.
